When people buy residential properties, there can be a lot of emotional attachment connected to the transaction, after all this is a place where people will live with all their hopes and dreams.
Even an investor just renting out can be swung this way, through swanky-looking sales particulars and ideas of fast money.
Which is why you need to look at some black-and-white practical issues so the detail doesn’t get missed. And in the frenzy of the deal going through and keys being handed over, then taking care ofn all the little extras.
An Example Flat
A good example of this is when you take a long leasehold interest of a flat in a block of other similar interests. You’ve not only got the usual buyer and seller -, or landlord and tenant - issues, but possibly additional management companies and agents dealing with common areas.
Therefore as purchasers near completion of their flat, to either live in or rent out, then these are the sort of issues you need to consider. In actual fact, even if you’re just a short-term tenant taking out an occupation lease, then a lot of these will also still be applicable.
And of course these will also apply for more straight forward issues, such as purchasing a detached property, or even more complicated multiple-interests being purchased at the same time and maybe being flipped straight on afterwards as a hard-core investment strategy.
Whatever situation you’re in, here’s ten core issues to be aware of:
1. Getting the Right Specification
If it’s new-build, then you’ll probably have the opportunity to get just the right specification agreed early on; whether that’s the right kitchen units, and extra dishwasher, or the final floor covering.
Or even if a serious refurbishment, then you may still have the same opportunity. Or at the very least for an existing property, knowing what items will be staying with the property and what the current owners or occupiers will be taking with them.
This all needs to be crystal-clear to avoid misunderstanding afterwards, with vague completion-details not helping. And always double-check things, not just what you see on a marketing brochure from a remote location.
2. Operational Services
Make sure you not only get the services you expect, but that they’re all working okay.
Right from basic utilities like gas, water, and electricity; but also services such as heating and cooling, hot -water provision and security alarms.
Don’t be fobbed off with technical talk and complicated-looking instruction manuals. Ask for a clear demonstration of things actually working, and knowing how to deal with going forward.
3. Checking Any Snagging
Snagging is more for new-builds and refurbs of course, and to some degree there will always need to be an allowance for this, however be clear on the detail.
This includes a time frame of reporting issues and then getting them completed in addition to how you actually note these too (always good to back up in writing).
It may be worth trying to address lots at the same time, but in reality this may take several different sub-contractors to attend all at different times and access arrangements.
4. Keys and Access Arrangements
Collecting the right key of course is an easy one. Although check how many copies are issued, and if any master copies are held back and arrangements for dealing with any lost ones.
And don’t forget all the little extra ones as well, for example external bike or bin stores, and access codes and fobs for any communal entrance points.
These may well need pre-programming before being issued, and additional ones and arrangements confirmed for, say, an investor who may be having a managing agent, cleaner, and handyman also attend the property.
5. Full Accessibility
Being able to access a property is a classic one that is not thought through until it’s too late.
Firstly, you have ongoing arrangements such as where cars and visitors can go, and being able to access other areas of a development as well as the part being taken.
Secondly, you have the moving-in process to deal with, right from delivery vans, to throwing out rubbish correctly, to other contractors and letting agents having access as well.
6. Official Handover Checklist
This is often completed on the day of handover, and although pretty straight forward, just make sure everything is actually discussed and talked about rather than just assumed.
Plus, don’t forget any ancillary information as items that need to go with it and all the right people then signing-off and copies being issued.
7. Multiple Purchases
For those serious investors looking at purchasing multiple interests in, say a block, a word of caution; just take one step at a time.
It may sound obvious, but actually visit the property and local area before agreeing these to see that reality matches expectations, and then look at phasing any completions so that after the first one there is room to change things if needs be.
8. The Local Area
In all the focus of the property transaccation, a very common-sense thing of actually inspecting the property and sussing out the local area can get missed.
This slinky new city-centre apartment may look great on marketing material and budget cashflows, but when you see the dubious area that it’s based in and how issues of vandalism and poor demand may effect things, then suddenly the honey moon period is over.
And understand the local demographics and lifestyles; where people work, local amenities and shops, and how near transport hubs you are.
9. Building Guides and Contacts
Getting all the documentation on how the property interest is run may seem unimportant, but this is actually essential, after all you wouldn’t purchase a car without the current MOT details and service history.
There may be a master Building Guide for owners and occupiers, and note any key contact details for, say, emergencies, out-of-hours, and general queries.
Multiple contact details may also be required for practical purposes like issuusing access details, all safely within data-protection parameters; other managing agents, actual occupiers, and any contractors.
Plus, get hold of any related documents such as warranties, guarantees, and user manuaels for gadgets.
10. Utilities & Outgoings
A final thought are the utilities, the main ones of course being gas, electricity and water. However, don’t forget other modern ones like TV connection aerials, internet lines, and ‘phone lines.
Some of these may need to be installed and a provider agreed with the end-occupier, so bottom-out the process for agreeing this.
A typical example is a new tenant trying to move their Sky TV package across to the new property to find that they can’t have their own satellite dish on the communal block, and the main communal-system requires upgrade through the landlord to handle, say, new Sky Q installations.
And two important aspects to all of these are firstly taking the meter reads at the correct time, and secondly knowing where emergency cut-off points are.
Plus, when it comes to liaising with the utility providers, remember that things can take time for actual accounts to be set-up and lines connected.
A final aspect as well, not technically a utility, is Council Tax and informing the local authority of the change. The key here is the owner of the area taking this on straight away, however they may need to wait to transfer the account again for a new occupier and apply any relevant discounts to their situation.
Getting The Basics Right
As you become involved in the transfer of a residential property interest, whether you’re the direct purchaser or seller or another advisor, then these above ten issues are critical to make things run smoothly.
This not only counts on the day of completion and moving in, but a whole array of issues building up afterwards.
You’ll see these most actively seen in a complex block of, say, flats, but the same principles apply for all others as well; take the time to get right now, and then enjoy the transfer afterwards.
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